(Bloomberg) -- Jefferies Financial Group wants an independent review of any payments George Weiss may have received from his eponymous investment firm, Weiss Multi-Strategy Advisers, before it filed bankruptcy earlier this year.
Payments to George Weiss or other Weiss officers in the two years before the firm filed bankruptcy in April could be voidable under Chapter 11 powers allowing failed companies to clawback payments to corporate insiders, Jefferies said in a Tuesday court filing.
The request comes after Weiss sought appointment of an independent examiner to review its decision to pay roughly $30 million in employee bonuses before announcing it would shut down and return cash. Jefferies said Tuesday the scope of any examination should be expanded to include potential insider payments.
Bankrupt companies, or firms they owe money to, can request that a bankruptcy judge appoint an independent examiner to review disputes. Jefferies contends its owed roughly $100 million and the two firms have been embroiled in litigation over the bonuses. Jefferies also claims George Weiss agreed to backstop the debt, which his lawyer has denied.
Jefferies also opposed a separate bid to have George Weiss fund the wind-down of his firm via a $1 million credit line. A New York bankruptcy judge is scheduled to consider the requests for an examiner and George Weiss loan on August 13.
Lawyers for Weiss and George Weiss didn’t return messages Wednesday seeking comment.
The case is Weiss Multi-Strategy Advisers LLC, 24-10743, US Bankruptcy Court for the Southern District of New York (Manhattan).
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